Reasons strategic plans fail and what to do | nnbw.com

Reasons strategic plans fail and what to do

Erica Olsen

Implementing your strategic plan is as important, or even more important, than your strategy.

It is the critical action that moves a strategic plan from a document that sits on the shelf to action that drives business growth.

Unfortunately, the majority of companies who have strategic plans fail to implement.

According to a Fortune cover story, nine out of 10 organizations fail to implement their strategic plan for the following reasons: 60 percent of organizations do not link strategy to budgeting; 75 percent of organizations do not link employee incentives to strategy; 86 percent of business owners and managers spend less than one hour per month discussing strategy, and 95 percent of a typical workforce does not understand their organization’s strategy.

For those businesses that have a plan in place, it can be discouraging to see the time and energy spent on the planning process wasted when nothing is implemented.While the topic of implementation is not exciting, it is a fundamental business practice that is critical for a strategy to take hold.

It is helpful to understand and avoid the common implementation mistakes.

Here is a list of common reasons strategic plans fail:

* No ownership The most common reason a plan fails is lack of ownership.

If people do not have an ownership stake and responsibility in the plan, it will be business as usual for all but a frustrated few.

* Lack of communication The plan doesn’t get communicated to employees and they don’t understand how they contribute.

* Mired in the day-to-day Owners and managers consumed by daily operating problems lose sight of long-term goals.

* Out of the ordinary The plan is treated as something separate and removed from the management process.

* Plan is overwhelming The goals and actions generated in the strategic planning session are too numerous because the team failed to make tough choices to eliminate non-critical actions.Employees don’t know where to begin.

* Plan is meaningless The vision,mission and value statements are viewed as fluff and not supported by actions or don’t have employee buy-in.

* Strategy is annual Strategy is only discussed at yearly weekend retreats.

* Implementation is not considered Implementation is not discussed in the strategic planning process.

The planning document is seen as an end in itself.

* No progress report There is no method to track progress such as a scoreboard and only measuring what’s easy, not what’s important.No one feels any forward momentum.

You can avoid the common mistakes by considering the following three major areas that contribute to the successful implementation of a strategic plan.

* Owning the Plan: Appoint a strategic plan leader and/or team.A leader devoted to the successful implementation of the strategy and plan is critical.

This person or team has the responsibility for tracking progress, scheduling strategy meetings, and keeping everyone informed of their responsibilities.As the business owner or chief executive officer, stay committed to the plan.

Every action must have a due date and a person responsible.You can let deadlines, but don’t let the action go away.Make sure everyone on your staff knows you are serious about implementing the strategic plan.

Supporting the plan: Often overlooked are the five key components necessary to support implementation: People, resources, structure, systems, and culture.

All those components must be in place in order to move from plan to action.

The right people on your team with the required competencies and skills are needed to support the plan.

In the months following the planning process, expand employee skills through training, recruitment or new hires to include new competencies required by the strategic plan.

Sufficient money and time allocated to support implementation are required.

Often, true costs are underestimated or not identified.Additionally,employees must have enough time to implement what may be additional activities they are not currently performing.

Appropriate lines of authority and clear communication are needed.

A plan owner and regular strategy meetings are the two easiest ways to put a structure in place.Meetings to review the progress should be scheduled on a monthly or quarterly basis, depending on the level of activity and time frame of the plan.

Both management and technology systems help track the progress of the plan and make it faster to adapt to changes.As part of the system, build in milestones into the plan that must be achieved within a specific time-frame.A scorecard is one tool used by many organizations that incorporates progress tracking and milestones.

Create an environment that connects employees to the organization’s mission.

To reinforce the importance of focusing on strategy and vision, reward success.Develop some creative positive and/or negative consequences for achieving or not achieving the strategy.

The rewards may be big or small, as long as they lift the strategy above the day-to-day so people make it a priority.

Adapting the plan: A strategic plan needs to be adaptive to survive changing or unanticipated conditions.Over the life of a strategic plan, a company’s vision and mission often remain the same, but its goals and objectives will probably need to be revised.

Depending upon the industry, some businesses can maintain a strategic plan for a year or longer, while others have to respond to market changes in less time.Move ahead with the plan as established, but be prepared to let go and switch strategies as necessary.

Corrective actions need to be taken quickly to compensate for the dynamic business environment most businesses operate in.

Implementation is the most difficult part of the planning process.No one factor listed above will make or break the successful implementation of the strategic plan.However,when these areas are considered and acted upon, the chances for successful implementation are greatly improved.

Most importantly, a business that has a strategic plan and implements it, is ahead of 90 percent of the companies who have no plan at all.

Quick List of Ideas for Implementation that some of my clients have used for successful implementation: Communicate the strategic plan to everyone in your organization.

Hang the summary of your strategic plan in a central location for easy review.

Involve your staff in the final development of the plan.Really ask for and use employee ideas.

Assign goals to individual employees.

Employees are responsible to solicit the help of others to achieve the goal.

Have your employees create the action items to support their assigned goals.

Review plans with management and/or group.

Use a scorecard to monitor progress monthly.

Hold a monthly meeting, one-on-one with the team leaders,where you only discuss strategy.

Hold a monthly or quarterly staff strategy meeting to report on the progress.

Re-visit and refine the strategic plan three months from now.

Hold yourself accountable through a mentor, personal coach, or business organization.

Link strategy to performance.

Throw a party when significant goals are reached.

Erica Olsen (Erica@m3planning.com) is VP of Marketing for M3 Planning of Reno.


News


See more